Downtown Business District Tax Contribution to ELPD Costs

The shootings in the Grove St. garage, as well as sobering financial numbers from last Saturday’s special council session (which might be a wake-up call for those until now unwilling to admit to the sobering reality), are a good occasion to look deeper at the issue of revenue for policing the downtown party scene.

I don’t have any methodology for estimating what percentage of policing costs are related to the downtown party scene, both direct and collateral as partiers go to and from. I’ve heard guesses, such as 50%. Maybe ELPD knows. Council and citizens should be told. Since 1971, when East Lansing was still a dry town, the Consumer Price Index has risen less than five fold. The budget for ELPD has risen more than fourteen fold.

It is quite possible to estimate how much tax revenue is available for policing costs from the downtown business district, defining that as the original DDA TiF District #2, between Abbot and Collingwood, two blocks deep.

I have been stressing tax diversion for redevelopment, because it is necessary to break the backs of the diehards, like Triplett, who keep insisting diverted taxes are free money and developers won’t redevelop if they are asked to pay any taxes at all, which of course, they won’t if you invite them not to. The more mature approach to tax breaks is such ideas as Schertzing’s “redevelopment government has to do” versus “redevelopment government wants to do” (and could wait) and “tax breaks should be a last resort not a first resort,” a point I’m stealing from a developer who probably would prefer to remain nameless.

But taxes diverted to the DDA or for brownfield projects, for now, only account for a small portion of the likely policing underfunding from the downtown business district — the impact of tax diversion will get worse over time, even with no new diversion, because costs will grow and revenue will not.

Taxable value of the DDA TIF District was frozen in 1991 at $15,859,730. The amount of taxes that go to policing is the number of mils from the city operating fund millage allocated to ELPD multiplied times that 1991 taxable value.

For the FY 2015 budget, the cost of ELPD, minus parking enforcement, came to ~$9.3 million.

There are probably several methods for estimating what percentage of city operating fund mils go to policing. I added revenue sharing, plus some fines and earmarked police department revenue to tax revenue, which came to ~$21.5 million, of which $9.3 million is 43%. So, I’m using 43% of the ~17.6 operating fund mils as going toward ELPD, excluding parking, or ~7.56 mils. This means ~$6.8 million of city operating fund millage goes to ELPD, minus parking.

At 7.56 mils, the downtown business district is contributing ~$120,000 per year to ELPD, minus parking. This is 1.76% of the city operating fund tax revenue going toward policing. In five years it will be about 1.5% and in ten years about 1.2%.

Eliot Singer

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